AREAS OF INTEREST: ENERGY PRICE REFORM, ELECTRICITY DEMAND, CO2 EMISSIONS, SAUDI ARABIA
Authors: Abdulelah Darandary; Jeyhun I. Mikayilov; Salaheddine Soummane
Paper#: j.eneco.2024.107400
Energy Economics
Link: https://doi.org/10.1016/j.eneco.2024.107400
In an effort to manage the rapidly growing national electricity demand, Saudi Arabia implemented two energy price reforms in 2016 and 2018. The effect of these reforms on electricity demand and on carbon emissions was analyzed in this paper. To account for regional variations in energy supply and in demand drivers, analyses were conducted for the Central, Eastern, Western and Southern regions separately as per their fuel mix and different sectors. The combined analyses show that between 2016 and 2019 the average energy demand was curbed from an annual increase of 5.3% to an annual decrease of 8.8%, and a total of 81-102 million tons of carbon emissions were avoided. The authors infer that energy price reforms can be an advantageous tool for promoting conscious energy consumption and for achieving climate change mitigation goals. They also suggest that such implicit carbon policies are more helpful in maintaining international competitiveness as apposed to direct policies such as carbon taxes and trading schemes